Can you try the following client properties: -
remote.connection.default.connect.options.org.xnio.Options..SASL_DISALLOWED_MECHANISMS=JBOSS-LOCAL-USER
remote.connection.two.connect.options.org.xnio.Options.SASL_POLICY_NOPLAINTEXT=false
I believe from the message you show that the client and server are running local to each other so the authentication is ocurring silently and locally, these properties first allow for the username and password to be sent to the server and secondly will allow the password to be passed plain text to the server which is required to pass it to JAAS.